Question 1

Deflation

Accepted Answer

A)   increases incomes and enhances the ability of debtors to pay off their debts.
B)   increases incomes and reduces the ability of debtors to pay off their debts.
C)   decreases incomes and enhances the ability of debtors to pay off their debts.
D)   decreases incomes and reduces the ability of debtors to pay off their debts.E) A) and D)
F) All of the above

Question 2

Suppose that velocity rises while the money supply stays the same. It follows that

Accepted Answer

A)   P x Y must rise.
B)   P x Y must fall.
C)   P x Y must be unchanged.
D)   the effects on P x Y are uncertain.E) B) and C)
F) A) and D)

Question 3

The value of money falls. This might be because the Federal Reserve

Accepted Answer

A)   bought bonds, which increased the money supply.
B)   bought bonds, which decreased the money supply.
C)   sold bonds, which increased the money supply.
D)   sold bonds, which decreased the money supply.E) A) and B)
F) A) and C)

Question 4

Economic variables whose values are measured in goods are called

Accepted Answer

A)   dichotomous variables.
B)   nominal variables.
C)   classical variables.
D)   real variables.E) A) and B)
F) B) and C)

Question 5

Given that firms change their prices infrequently, a business that has just raised its price will have a __________ relative price; over time as its price remains fixed its relative price __________.

Accepted Answer

The answer of Given that firms change their prices infrequently,...

Question 6

Suppose that monetary neutrality and the Fisher effect both hold. An increase in the money supply growth rate increases

Accepted Answer

A)   the inflation rate and growth of real GDP.
B)   the inflation rate but not the growth rate of real GDP.
C)   the growth rate of real GDP, but not the inflation rate.
D)   neither the inflation rate nor the growth rate of real GDP.E) B) and C)
F) A) and C)

Question 7

Which of the following is correct?

Accepted Answer

A)   If the Fed purchases bonds in the open market, then the money supply curve shifts right. A change in the price level does not shift the money supply curve.
B)   If the Fed sells bonds in the open market, then the money supply curve shifts right. A change in the price level does not shift the money supply curve.
C)   If the Fed purchases bonds, then the money supply curve shifts right. An increase in the price level shifts the money supply curve right.
D)   If the Fed sells bonds, then the money supply curve shifts right. A decrease in the price level shifts the money supply curve right.E) None of the above
F) All of the above

Exam 22: Money Growth and Inflation

Given that firms change their prices infrequently, a business that has just raised its price will have a relative price; over time as its price remains fixed its relative price .

Correct Answer
verified

Suppose that monetary neutrality and the Fisher effect both hold. An increase in the money supply growth rate increases

Correct Answer
verified

Suppose that velocity rises while the money supply stays the same. It follows that

Correct Answer
verified

Deflation

Correct Answer
verified

Economic variables whose values are measured in goods are called

Correct Answer
verified

The value of money falls. This might be because the Federal Reserve

Correct Answer
verified

Which of the following is correct?

Correct Answer
verified

Exam 22: Money Growth and Inflation

Given that firms change their prices infrequently, a business that has just raised its price will have a __________ relative price; over time as its price remains fixed its relative price __________.

Correct AnswerverifiedShow Answer

Suppose that monetary neutrality and the Fisher effect both hold. An increase in the money supply growth rate increases

Correct AnswerverifiedShow Answer

Suppose that velocity rises while the money supply stays the same. It follows that

Correct AnswerverifiedShow Answer

Deflation

Correct AnswerverifiedShow Answer

Economic variables whose values are measured in goods are called

Correct AnswerverifiedShow Answer

The value of money falls. This might be because the Federal Reserve

Correct AnswerverifiedShow Answer

Which of the following is correct?

Correct AnswerverifiedShow Answer

Given that firms change their prices infrequently, a business that has just raised its price will have a relative price; over time as its price remains fixed its relative price .

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
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